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Talent war heats up as staff turnover to cost Australia $100bn in 2008
Workers need more than champagne and iPods to stay in their jobs
SYDNEY, January 1 2008 – 2008 risks being the year of the revolving door if employers continue to focus on simply attracting new staff, rather than developing and retaining current employees. The resulting staff turnover is expected to cost Australian businesses more than $100 billion over the coming 12 months, leading information services company Unisys has predicted.
“At a time when the skills shortage is squeezing the Australian economy, staff turnover is turning into a major problem that is already costing the country’s businesses more than $100 billion a year. It costs more to continually replace staff, and in a tight labour market each new hire drives up wage levels for the same job role without a corresponding increase in productivity. When good staff leave intellectual property and the valuable relationships they established with customers and business partners go with them. All indications are that this will get worse in 2008,” said Lee Ward, General Manager, Global Outsourcing and Infrastructure Services, Australia.
Unisys top three strategies to keep good staff:
1. Accept that staff don’t want the same job forever – find out what challenges stimulate them and develop a tailored progressive career path within the organisation.
2. Identify and groom best performers – work out what technical and business skills will develop the individual and ensure they access the training and experience to attain them.
3. Support work-life balance – offer mobile tools and flexible work arrangements to better manage time and encourage programs which support a healthy lifestyle.
“Now is the time for businesses to examine their employees’ needs and expectations in order to create an environment to retain, not just attract, the right staff. Once they’ve joined the company, you need to be able to offer career development through training, experience and exposure to the challenges and opportunities that excite them. The employer needs to take an active role,” Ms Ward said.
Unisys analysis shows the cost of replacing a worker is around 1.5 times that person’s yearly salary. Based on latest ABS figures, 1.2 million people changed jobs in the 12 months to February 2006. Using average weekly earnings, this ends up costing the Australian economy more than $100 billion a year 1. A study by the Australian Chamber of Commerce found that 69.9% of businesses are concerned about wage levels increasing without a corresponding increase in productivity 2.
“The Australian labour environment is challenging: we have the lowest level of unemployment in more than 33 years 3, around 21% of Australians have a Bachelor degree or higher 4 and almost one in five aren’t in a traditional full-time role 5. In other words, employees are qualified, they are getting younger, they are on the move and they don’t expect to stay with the same employer for the life of their career,” Ms Ward said.
“Instead of offering potential staff champagne and iPods when they join, like some firms are reported to be doing, Australian businesses need robust talent management programs which will nurture staff, provide the right long-term rewards and show workers a real career path.”
Unisys has proactively tackled the problem of keeping good staff through its Unisys Aspire talent management program which began in Australia and New Zealand in 2003/04, and has since expanded throughout Asia-Pacific. The Aspire program is designed to accelerate the readiness of the region’s high potential individuals by ensuring they are identified and then developed and prepared to step into senior leadership roles within Unisys. Two of the three streams of the program – Future Leader and Emerging Leader – also include a management certification from Macquarie Graduate School of Management (MGSM). To date, 46 employees across the region have completed the program.
A healthy work-life balance is equally important for creating employee engagement, this encompasses far more than merely how many hours you spend in the office. It also requires a combination of physical and emotional wellbeing. The annual productivity cost attributed to obesity is estimated to be $1.7 billion 6, highlighting the direct benefit for businesses ensuring they have a healthy and productive workforce.
The Living Well @ Unisys program is designed to actively encourage employee health and wellbeing. It incorporates a range of ongoing activities from lunch time seminars covering a range of topics from nutrition to managing stressful situations, an interactive website and employee activities, and free water bottles and lunchboxes to encourage staff to keep hydrated and bring healthy lunches to work.
1 6209.0 - Labour Mobility, Australia, Feb 2006, show s that 1.2 million people changed employer/business in their main job in the 12 months to February 2006. Based on average Australian wages of $1070.4 per week, according to the ABS Average Weekly Earnings, Australia, Feb 2007, Private and Public Fulltime Adult ordinary time earnings = $1,070.40. * $1070.40 x 52 = $55660.80 a year. * $55,660.8 x 1.5 = $83,491.20 -- Unisys metric on the cost of losing a worker. * $83491.20 x 1.2 million = $100,189,440,000 ---- $100.2 billion.
3 Media release, 9 August 2007, Minister for Employment and Workplace Relations, Hon Joe Hockey MP.
4 Education and Work, Australia, May 2006 (cat. no. 6227.0), Australian Bureau of Statistics.
5 6361.0 - Employment Arrangements and Superannuation, Australia, Jun 2000, Australian Bureau of Statistics.
6 Access Economics Report: The Economic Costs of Obesity, October 2006
About Unisys Asia Pacific
Unisys offers clients solutions for secure business operations by aligning technology with business strategy. Drawing on a history of industry innovation and expertise, Unisys provides specialised services, delivered by trusted consultants. In Asia Pacific, Unisys delivers services and solutions through subsidiaries in Australia, New Zealand, China, Hong Kong, India, Korea, Malaysia, The Philippines, Singapore, Taiwan and Thailand and through distributors or resellers in other countries in the region. For more information, visit www.unisys.com.
Contact
Claire Hosegood, Unisys, 0411 253 663
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